WV Officials Say Rail Access Key in Attracting Cracker Plant
According to West Virginia officials, one of the keys to attracting an ethane cracker plant to the state is the humble railroad. In locations where there is only a single railroad line, costs are higher, so officials are discussing ways of introducing more rail competition at potential locations in the state should one of those locations be selected as the location for an ethane cracker. Options include building a short-line railroad and either rehabilitating or building new railroad bridges.
One of the keys to attracting an ethane cracker plant to West Virginia will be to ensure low-cost rail service – and members of the Governor’s Marcellus to Manufacturing Task Force on Tuesday discussed ways to provide it.
As Patrick Donovan, with the Rahall Appalachian Transportation Institute told the panel, 90 percent of all chemical producing facilities in the state – and all of the proposed sites for the cracker plant site — are "captive rail" facilities.
That means the plants or plant sites are served by only one railroad, either CSX or Norfolk Southern.
State Commerce Secretary Keith Burdette said shipping costs on captive rail can be as much as $1,500 per rail-car higher than at plants located where there is competition between railroads.
Considering that the cracker plant would be shipping out 12,000 to 15,000 rail-car loads of polyethylene pellets each year, the need to assure competitive pricing is critical, he said.
"The end issue is to identify viable, financially feasible options to have ready," he said.*
*The Charleston Gazette (Dec 20, 2011) – Key to ethane cracker is low-cost rail service, panel says